Question: Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams at $70 per share. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $70 to $82.50, and the stock has paid a dividend of $10.00 per share.

a. What is the remaining margin in the account?

Remaining margin $

b-1. What is the margin on the short position? (Round your answer to 2 decimal places.)

Short margin %

b-2. If the maintenance margin requirement is 30%, will Old Economy receive a margin call?

Yes

No

c. What is the rate of return on the investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)

Rate of return %